News

Oops. Freddie Mac attack smacks back

Posted January 30, 2012

As Connie Mack continues to stalk Newt Gingrich instead of hitting the campaign trail for himself, the Miami Herald’s Marc Caputo and Scott Hiaasen are reporting the Congressman’s Freddie Mac attack against Gingrich is smacking back, with revelations Mack and his wife “have turned a profit as well off Fannie Mae, a government-sponsored enterprise that, along with Freddie Mac, is blamed for stoking the mortgage crisis.” This isn’t the first time Mack has been caught attacking his own Achilles heel. In an attempt to pander to the Tea Party, the part-time Florida resident has been vocal against earmarking - all the while voting for billions of budget earmarks.

Miami Herald: Freddie Mac attack boomerangs on Connie Mack

Rep. Connie Mack has been criticizing Newt Gingrich's ties to Freddie Mac, but the congressman is less willing to talk about his own profits from a government-sponsored mortgage enterprise.

But when it comes to Mack’s profits from Freddie Mac’s cousin agency, Fannie Mae, the congressman was mum.

"What’s important here is what Newt Gingrich did for Freddie Mac," said Mack, a Republican U.S. Senate candidate from Fort Myers.

The Romney campaign made Gingrich’s estimated $1.6 million Freddie Mac consulting work an issue because it was a two-fer: It showed Gingrich was a Washington insider and it has the potential to stoke voter resentment in a state where one in 360 properties is in foreclosure.
But the attack also had a boomerang effect.

At Thursday’s Republican presidential debate, Gingrich said Romney had made $1 million from Freddie Mac and Fannie Mae bonds. Romney responded by noting that Gingrich also had invested with the mortgage giant.

And, it turns out, Mack and his wife, California Rep. Mary Bono Mack, have turned a profit as well off Fannie Mae, a government-sponsored enterprise that, along with Freddie Mac, is blamed for stoking the mortgage crisis.

Like Romney, their profits were derived from bonds, not stocks. Romney also said his investments were made by a manager of a blind trust.
According to Mack’s 2008 financial disclosure form filed with Congress, he and his wife held Fannie Mae bonds worth between $15,000 and $50,000 by the end of 2008.

The report also shows that the Macks sold more than $15,000 in Fannie Mae bonds on Sept. 30, 2008. The sale came just three weeks after the Bush administration took over Fannie Mae and a related mortgage industry titan, Freddie Mac, in an effort to prevent a potential financial meltdown.

The government’s move pummeled Fannie Mae stockholders, who lost their investments — but it benefited bondholders like the Macks, providing government backing to Fannie Mae’s debts.

The Macks sold more of their Fannie Mae bonds in 2009, earning capital gains between $200 and $1,000, records show.

The Freddie Mac attack isn’t the only Romney campaign issue that draws attention to Mack’s time in Congress. Romney’s campaign has hammered Gingrich for allowing hometown spending in the federal budget — a process known as “earmarking” that Mack participated in as well.
But Florida voters seem much more concerned with the housing industry than earmarks.

“In Florida, a lot of people lost their homes, their homes are under water, and they tie that to Freddie Mac,” Mack said. “Speaker Gingrich has had an eight-year relationship with Freddie Mac, a contract with the lead lobbyist for $25,000 a month — $1.6 million.”

When asked a second time if it’s fair to criticize Gingrich for his profits when he also benefited, Mack stayed on message by calling Gingrich a lobbyist.

“He can talk about other people owning stock, maybe he doesn’t know what a blind trust is,” Mack said, echoing Romney’s lines given hours later in the debate.

“Speaker Gingrich has only released a part of a two-part contract over eight years,” Mack said. “He says he was an historian. People aren’t buying it.”

Hours later, when Romney brought up the same points, Gingrich said he had released all the contracts that said “I would do no….no lobbying, none.”

Not every Republican is keyed up over the issue, though. Here’s what candidate Ron Paul said when asked at the debate about Fannie and Freddie investments: "That — that subject really doesn’t interest me a whole lot.”